30-Year Vs. 15-Year Mortgage – What’s Best?

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30-Year Mortgage

I used to think 15s were better than 30s, in fact I used to have a 15 on my own home, but I’ve since learned better, and I’ve only used 30-year fixed amortizing loans for both my primary residence and for my income properties. Look, someone with the 15-year loan can point out “I can show you right here all the interest that I’m saving,” and they’re absolutely right, they are saving an interest expense, but what that person fails to consider is the fact that it’s not that simple. Instead, if you invested the difference between the lower 30-year payment and the higher 15-year monthly payment, and you turned around and invested that in more income property, you’re almost always going to be substantially further ahead than you would be with the 15-year loan. Additionally, the 15-year doesn’t give you any flexibility.

You must continue to make that higher payment. What if you lose your job? Well, like I said you must continue to go ahead and make that higher payment. So, the 30-year gives you greater flexibility, and it gives you greater cash flow – you have more discretionary income every month to do what you want to do with it. Additionally, on your income properties oftentimes with the 15-year loan it won’t provide you with any cash flow, but with a 30-year loan and its lower payment now you have greater cash flow. You are after creating income streams for yourself, not creating bank servitude for yourself. So, keep that in mind when you compare the 30-year versus the 15-year loan, because what is visible in savings in the 15-year that’s something, but what is not visible is the investment gain and the flexibility that you would have with the difference. So, consider the 30-year loan.

Mortgage Tips You Should Know: 203k Renovation Loans

There are a number ways an individual can approach getting in renovation loan or ways to improve their home one of those happens to be a 203K. A 203K product is a mortgage product which certain leaders will offer that allow you the ability to renovate your home, put in a new kitchen, remodel your living room, put in windows and those are loans that are coordinated not only from the with the lender but with the contractor that helps you get the type of home that you would like to have. What is the process to get a renovation loan? Part of the process for getting a renovation loan is to be able to know and establish what it is you want to do in that rehabilitation process.

That is followed by being able to establish a budget and after that being able to go and talk to various lenders to be able to know what rates and fees will apply to that specific loan. How our loan proceeds called draws distributed? The jobs are distributed and those are in funds that are given back to the contractor as they complete the work. So that’s one of the things you can be careful about or at least assured that a contractor is only going to be paid for the work that’s been accomplished. Those are called draws. You should shop lenders and their reputations for renovation loans. I think it’s very important to consider that there are lenders who specialize in 203K’s. What I would do is look for references. References are the key not only for lenders but also for contractors. 203K’s are specialized FHA loans. But they’re really helpful and they can really help you enjoy the home that you live in.

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